BRUSSELS -- No matter how serious the issues NATO is facing in Afghanistan, Kosovo, or elsewhere -- there's one that trumps them all.
And that issue is money -- or, rather, the lack of it. The problem has steadily crept up NATO's agenda, as budgets are slashed across Europe in response to a combination of the sovereign lending crisis and stalled economic growth.
At this week's defense ministers' meeting in Brussels, diplomats say funding issues are the "most important topic." And it is not just about savings. The impact of the funding squeeze is also feeding into the current debate on NATO's future shape and purpose.
NATO Secretary-General Anders Fogh Rasmussen on June 10 acknowledged the extent of the problem, saying the alliance, too, will inevitably be affected.
"All member states in NATO are faced with economic challenges. All governments are faced with budgetary constraints. All governments are faced to make more efficient use of resources. So, they would expect the alliance to follow suit," he said.
'All About The Euro'
The NATO chief was first asked by NATO defense ministers to look into possible cuts at their meeting in Istanbul in February. But the impact of the euro zone liquidity crisis, which this week saw the 16-country group finalize a 500-million euro salvage fund, has drastically upped the ante.
One NATO diplomat described the top priority of most European allies by saying, "It is all about saving the euro."
Huge defense budget cuts have been announced or are imminent in Germany, Italy, France, and Britain.
Rasmussen said he is seeking savings "across the board." This includes proposals for pooling of resources, the postponement of some investments, and above all, downsizing NATO's own bureaucracy.
According to officials, Rasmussen is proposing to streamline NATO's Cold-War era command structure, dissolve half of the 14 agencies the alliance currently runs, and reduce the number of joint NATO personnel from the current 13,500 to as few as 7,500.
The problems are urgent. The German daily “Frankfurter Allgemeine Zeitung” reported on June 9 that for the first time in its 60-year history, NATO is facing a 500-million-euro shortfall. The alliance has a 2-billion-euro budget.
Despite the urgency of the problem, the defense ministers meeting will take no decisions this week. The issue will come to a head at a joint NATO foreign and defense ministers' meeting on October 14 -- a month before the alliance's summit in Lisbon, where a new strategic concept will be adopted.
The two processes -- cutting costs and reviewing NATO's future goals -- now intersect, officials say.
Russia's neighbors, Poland and the three Baltic countries -- but also Norway and Turkey -- are worried that the cuts will come at the expense of NATO's conventional deterrence capability. At the other extreme are allies who prefer a downsized alliance with an emphasis of out-of-area operations.
Paradoxically, officials say, countries favoring a "NATO of operations" are often faced at home with a growing public backlash against the alliance's biggest operation to date: Afghanistan.
Canada and the Netherlands, for example, are both about to drastically reduce their troop presence in the country.
The standoff between proponents of conventional defense and operations reflects divisions over Russia -- but with some significant differences.
Thus, Germany, a staunch backer of closer ties with Russia, also believes NATO should not become a global "policeman."
Rasmussen himself, despite his cost-cutting zeal, has come in for criticism. Some allies say his proposals lack a vision. Slashing bureaucracy for its own sake could be counterproductive, critics say, if NATO ends up emasculated and incapable of carrying out its Article 5 mutual defense responsibilities.
The naysayers mostly hail from the ranks of those allies who are concerned the alliance is paying too little heed to conventional defense.
In Brussels, Rasmussen sought to reassure skeptics, saying NATO's ambitions will not be downgraded.
"Our point of departure will be our current level of ambition," he said. "As you know, to be able to manage two major operations and six smaller ones. And we have no intention of changing our level of ambition."
But the skeptics are unlikely to be mollified. There are fears that spending cuts will have the effect of allowing NATO's European allies to get away with less.
This, in turn, will mean the alliance will have to accept the terms of those allies who believe security comes before everything else -- above all the United States. Diplomats say this would be liable to have an adverse effect on alliance solidarity.
Traditionally a dilemma for "Old Europe," so-called coalitions of the willing are increasingly less popular in Eastern Europe, too, where governments fear that Washington's alienation from NATO will lead to a distancing from Europe.